Microsoft Outlook.com Email Unlikely to Catch Google Gmail

By Todd R. Weiss |
Posted 2012-08-01

Microsoft's newly announced major refresh of its 16-year-old Hotmail product has the goodsfrom a new name, Outlook.com, to a streamlined interface, key improvements and the integration of social media connectionsbut those coming changes still appear to be too little, too late to get dedicated Gmail or Yahoo Mail users to jump ship.

That's the reaction from two IT analysts who say that the way-overdue revamping of the former Hotmail service will allow Microsoft to catch up to Google much more than it will entice contented Gmail users to find a reason to switch.

"It's puzzling because it's been 16 years since Hotmail was introduced, and this is the first real change that Microsoft has done with it," said Dan Keldsen, principal analyst at Information Architected.

Microsoft announced the coming changes in a blog post July 31 that shared its vision for the new Hotmail replacement and described how the company has been busy reimagining personal email in its upcoming Outlook.com offering. Coming eight years after Google introduced its now-entrenched Gmail product, the new Outlook.com is said to be a modern take on email, designed for "the next billion mailboxes," according to Microsoft.

But one big problem with all of that hype is that while that's all good progress for Microsoft, a huge number of users today already have a modern email service filled with featuresin their existing Gmail accounts, said Keldsen.

"The laundry list that I've seen of what's supposed to be included there in Outlook.com appears to all be catch-up to Gmail, to Google Drive, to Yahoo's Web services and to Apple's Mobile Me and Apple's iCloud," said Keldsen. "I think it's kind of astonishing that they're so late to the game."

What's really amazing is that Microsoft actually lauds the new Outlook.com service as having a minimalist aesthetic. "Thats what Gmail already is," said Keldsen.

One new feature of Outlook.com that could be compellingthe ability of users to be able to access Skype through their Outlook.com email accountswon't even be ready when the new service debuts and will be added later, which, Keldsen said, is shocking.

Microsoft bought Skype in 2011.

"Why didn't they do that Skype integration first?" Keldsen asked. "Why that isnt one of the first things brought into this new re-launch baffles me."

What the Outlook.com unveiling does prove, according to Keldsen, is that while Gmail and Google Apps for the enterprise have been side businesses for Google for years, "this is a sign that Microsoft is getting more serious targeting Google and its apps role with Outlook.com, Office 365 and other products. And like Google, they're trying to go with the consumer side first."

The problem today for Microsoft, however, is that "Google is way ahead," said Grey. "Users won't abandon their Gmail accounts and start all over again" because they are already entrenched with Gmail accounts that meet their business needs very well, she said. "And its a pretty good online email service."

One area where a new Outlook.com could help Microsoft better compete with Google is by offering improved social media connections where users can link all their accounts, said Grey.

"Google has built and is continuing to build out social community services," such as adding chat from its acquired Meebo unit, said Grey. "Microsoft really doesn't have that kind of offering yet. That's what they're attempting to do with Outlook.com. All we know is that social media, mobility, connecting with the community, thats where Microsoft needs to be to connect with the prosumer market, and they have never done that."

The new Outlook.com name for the revamped Hotmail service, though, has both Keldsen and Grey shaking their heads.

"Outlook is already a product," said Keldsen, describing Microsoft's existing application-based email client. "It seems to me that it only confuses things. If this is really their reinvention of Webmail, then I would have used a different name. If after this long a time, the best they can do is to switch the name from Hotmail to Outlook.com, thats pretty bad."

Grey said the name change will be very confusing for customers, adding: "They need to do effective branding, and Outlook.com is not it."

Editor's Note: This story was corrected and updated to clarify when Microsoft acquired Skype.